SVS Securities administrators expect full return to clients in respect of custody assets and client money

Maria Nikolova

The exceptions relate to a very small number of clients whose losses exceed the FSCS’ compensation limit of £85,000 per claimant.

The administrators of SVS Securities plc, an investment firm offering broker-dealer and discretionary managed services, have earlier this week published a report providing clients and creditors with an update on the progress of the Special Administration of the company for the six month period from August 5, 2019 to February 4, 2020.

The Administrators anticipate that, other than a very small number of exceptions, there will be a full return to clients in respect of custody assets and client money. The exceptions relate to a number of Clients who may not be eligible to receive compensation in respect of any shortfalls arising out of specific arrangements between the clients in question and the company and costs from the Financial Services Compensation Scheme (FSCS) or whose losses exceed the FSCS’ compensation limit of £85,000 per claimant.

The Administrators have secured client money of approximately £24.9 million, in full, from across 20 pre-appointment bank accounts.

The Administrators initially estimated that SVS Securities had approximately 21,000 clients, however, after conducting further analysis on the client and account base that is held across three different IT platforms, the Administrators identified a number of clients holding multiple accounts with the company. This further analysis has identified approximately 19,200 unique clients. The custody assets and client money are held by a mixture of execution only, discretionary and FX clients. As at August 5, 2019, SVS’s account base comprised 14,855 equity accounts (including 773 discretionary accounts), 10 prime broker accounts and 6,547 FX accounts.

Approximately 500 of SVS’s FX clients and 30 of its advisory clients were classified as elective professional clients (“EPC”) and entered into terms with the company which created title transfer collateral arrangements with respect to the treatment of those EPCs’ monies. The effect of the title transfer arrangements was that monies deposited with the company by those EPCs were not treated as client money subject to the FCA’s rules and, instead, formed part of the company’s own house monies.

According to SVS’s records, the aggregate amount owed by the company to the FX EPCs is approximately USD 4.6 million, and the aggregate amount owed by the company to the advisory EPCs is £206,000.

On November 1m 2019, the FSCS posted an update on their website regarding the status of the company’s EPCs, confirming that eligible EPCs (i.e. individuals and small businesses) will be protected by FSCS compensation up to the FSCS compensation limit of £85,000 per claimant.

The Administrators says they are currently liaising with the FSCS regarding payment of that compensation. At this stage EPCs do not need to do anything. They will be contacted in due course when the Administrators receive confirmation from the FSCS as to how claims for compensation for eligible EPCs will be administered.

Clients who have not already submitted their claims are advised to do so as soon as possible. The extended deadline for clients to submit their claims to Custody Assets and Client Money expired on February 6, 2020. Although the Administrators anticipate that the Client Portal will remain open for a further period of time, any clients who have not submitted a claim via the Client Portal are encouraged to do so as soon as possible, or where invited to do so by the Administrators, as the Administrators anticipate closing the Client Portal for the submission of claims to Client Assets in the coming weeks.

Clients who have not submitted a claim via the Client Portal and any clients who submitted a claim following the expiry of the February 6, 2020 deadline, when making distributions and/or transferring Client Assets to a regulated broker, the Administrators will make allowance for those Clients’ entitlements to Client Assets based on SVS’s records when effecting any transfer or distribution.

As FinanceFeeds has reported, the Administrators have been working to identify an appropriate single broker to whom the Custody Assets and Client Money held by SVS can be transferred. The Administrators have selected a preferred broker for the transfer and Heads of Terms have been agreed. The Administrators are working closely with the broker to agree the terms, and the operational mechanics, of the transfer of all client accounts.

Regarding any distribution, the Administrators’ current expectation is that an application to approve their Distribution Plan will be made to the Court in April 2020.

Read this next

blockdag

BlockDAG Presale Draws Massive $32.4M Hinting At its 30,000x ROI Potential, Overshadowing Retik Finance at Bitmart

Learn why BlockDAG’s innovative strategies and $32.4M presale success are making millionaires, overshadowing Retik Finance’s struggle on Bitmart.

Institutional FX

Malaysia’s exchange launches API for onboarding retail investors

“The Exchange actively listens to the evolving needs of our customers. This initiative is key in delivering on our commitment towards greater customer-centricity. We will continue to work closely with our POs and introduce service innovations to attract more investors, bolstering the competitiveness of our market.”

Fintech, Uncategorized

LiquidityBook welcomes JonesTrading to LBX Post-Trade Hub

“As we near the T+1 deadline, we are excited to continue helping firms achieve straight-through processing in addition to delivering new enhancements to our comprehensive range of cloud-native buy- and sell-side trading solutions.”

blockdag

Should I Invest Today? Which Altcoins Could Make 2-5X Profits Amid the Latest News?

Investing in cryptocurrencies can be a journey full of surprises, given their volatile nature.

Executive Moves

Bakkt promotes Ray Kamrath to CCO of Crypto

Bakkt has promoted Ray Kamrath to Chief Commercial Officer of the company providing custody, trading, and onramps to the crypto space.

Industry News, Uncategorized

HSBC relocates US headquarters to The Spiral, New York

HSBC has opened its new U.S. headquarters at The Spiral, a renowned office building in New York City’s Hudson Yards neighborhood.

blockdag

Best Cryptos to Buy Before the Real Bull Run Kicks Off

With the bull run of 2024 already underway, investors are eager to identify cryptocurrencies that promise significant growth.

Market News

This time is different – is it?

The stock market wants lower interest rates – or rather, it has been expecting them for months. Justified? The US economy looks very robust, so higher interest rates would actually be the order of the day.

Industry News

CFTC fines JP Morgan $200 million for not monitoring billions of orders

In 2021, in the course of onboarding a new trading exchange, J.P. Morgan discovered its surveillance of trading on multiple venues and trading systems was not operating correctly, resulting in gaps in J.P. Morgan’s trade surveillance on these venues.

<